Washington, DC - The Federal Trade Commission announced its Opinion and Final Order against generic pharmaceutical company Impax Laboratories LLC [a public version of which will be linked to this news release shortly]. The Commission ruled that Impax engaged in an illegal pay-for-delay, or “reverse payment,” settlement to block consumers’ access to a lower-cost generic version of Endo Pharmaceuticals Inc.’s branded extended-release opioid pain reliever Opana ER.

In its Opinion, written by Commissioner Noah Joshua Phillips, the Commission held that Complaint Counsel proved that the agreement between Impax and Endo Pharmaceuticals Inc. violated Section 5 of the Federal Trade Commission Act. In reaching its decision, issued on March 28, the Commission reversed the Administrative Law Judge’s Initial Decision following an appeal by Complaint Counsel.

The Commission found that Endo possessed market power in the market for branded and generic oxymorphone ER. The Commission found that Impax received a large and unjustified payment, which included: (1) a “No AG” commitment, i.e., a promise from Endo not to launch an authorized generic during the 180-day exclusivity period that the Hatch-Waxman Act provides to the first generic filer; and (2) an additional credit that Endo would pay Impax in the event the market for Opana ER declined before Impax’s entry date.

The Commission explained that the U.S. Supreme Court’s Actavis decision held that eliminating the risk of competition through a reverse payment settlement itself constitutes an anticompetitive harm. The Commission found there was ample evidence of a risk that Impax could have launched a generic product before the agreed-upon date, had it not entered into the reverse payment settlement with Endo. The Commission therefore concluded that Complaint Counsel established a prima facie case.

The Commission further determined that Impax failed to show a cognizable procompetitive rationale for its reverse payment. The Commission explained that Impax bore the burden to prove that any alleged benefits were adequately linked to the challenged restraint. Because Impax failed to argue the procompetitive benefits it identified were related to the restraint at issue, rather than the settlement as a whole, it failed to satisfy this burden. The Commission found in the alternative that Complaint Counsel had established a viable less restrictive alternative.

The Commission’s Final Order bars Impax from entering into any type of reverse payment that defers or restricts generic entry, including no-Authorized Generic commitments, as well as certain business transactions entered with the branded pharmaceutical manufacturer within 45 days of a patent settlement. The Order also bars Impax from entering any agreement with another oxymorphone ER manufacturer that prevents or restricts competition between oxymorphone ER products. The Order does not affect existing agreements.

The Commission vote approving the Opinion and Final Order was 5-0.

Impax may file a petition for review of the Commission decision with a U.S. Circuit Court of Appeals within 60 days of service of the final order.